Millions of older Americans who are already struggling with rising gas and food prices will soon have to pay more for prescription drugs, said Anna Wilde Mathews in The Wall Street Journal. The Trump administration announced last week that it is scrapping a Biden-era subsidy program for Medicare drug plans, known as Part D, starting next year. The program, which this year will give insurers an estimated $3.6 billion to “blunt increases in premiums,” lowered average premiums by about 40% in 2025 for Part D’s 25 million enrollees. About 75% of enrollees, who today pay an average monthly premium of $36, will be hit with higher bills in 2027 because of the cancellation. The Trump administration said the subsidies encouraged insurers to hike rates, knowing the government would pick up the tab. Mehmet Oz, administrator of the Centers for Medicare and Medicaid, said the insurance industry “bailout” was “no longer needed,” and that the administration was working with pharma companies to lower drug costs.
“Letting these Medicare subsidies expire is the right thing to do,” said The Washington Post in an editorial. The program began in 2024 with an administrative action by President Joe Biden, with no authorization from Congress. It was always a “Band-Aid for bad policy, not a long-term solution for health-care costs.” Rather than addressing why Part D premiums were going up, the subsidies shifted more of the bill to taxpayers. “If a health policy can’t work without taxpayers bailing out insurance companies when costs rise more than expected, the underlying policy is the problem, not the planned expiration of the bailout.” The subsidy was always intended to be temporary, said Aliss Higham in Newsweek. It was designed to “limit volatility and variation in Part D premiums” as insurers adapted to changes in the 2022 Inflation Reduction Act, which reduced Medicare enrollees’ out-of-pocket expenses and capped insulin and vaccine costs. Ultimately, more than half the subsidy money flowed to just one company, UnitedHealth Group, which Oz called “unacceptable.”
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